Driven by record high traffic to its website and retail stores around the world, On Holdings continued to outperform expectations and projections in the fourth quarter and year.
Net sales for the Swiss running brand in fiscal 2023 hit 1.8 billion Swiss francs, a jump of 46.6 percent over the prior year with net income of 79.6 million Swiss francs and an adjusted EBITDA margin of 15.5 percent.
Net sales through the company’s direct-to-consumer channels increased 50.9 percent to 671.8 million Swiss francs while wholesale sales increased 44.2 percent to 1.1 billion Swiss francs.
In the fourth quarter, sales rose 21.9 percent to 447.1 million Swiss francs. The company said direct-to-consumer sales now account for 46.2 percent of overall sales, the highest in its history, and coupled with full-price sales both online and in its stores, gross profit margin reached 60.4 percent.
The momentum has continued into 2024, the company said, and coupled with some “exciting and highly innovative product launches” slated for later this year, On is now projecting a growth rate of at least 30 percent. Sales are now expected to hit at least 2.25 billion Swiss francs with a gross profit margin of about 60 percent and an adjusted EBITDA margin in the range of 16 to 16.5 percent for the full year of 2024.
Martin Hoffmann, co-chief executive officer and chief financial officer, said: “On our journey toward building the most premium global sportswear brand, 2023 was another exceptional year. We achieved an outstanding 55 percent constant currency net sales growth, while bringing efficiency and profitability to new heights and driving the highest positive cash flow in our history. We enter 2024 with a lot of tailwind and opportunities in all parts of the business. The demand for the On brand remains very strong. Exciting product launches and big brand moments are in the making. We have more capabilities to execute on our strategic plan than ever before — from retail to apparel, from e-comm to operations.”
David Allemann, cofounder and executive co-chairman of On, said: “We are proud to look back at a year filled with milestones that highlight On’s unique position in the market. Fueled by athlete successes, including Hellen Obiri becoming the first woman in 34 years to win both the Boston and New York City marathons in the same year, we witnessed our running products soar to new heights in 2023. While our portfolio is deeply rooted in our commitment to innovation, catering first to athletes and runners, we recognize the wider opportunities for On in the evolving sports and fashion landscape. As we look to further expand our presence in the global premium sportswear market, we have put a big emphasis on building awareness for our apparel offering. Based on the recent success, new and updated products and supported by our own retail store rollout, we expect to significantly build this category over the next years.”
